Monthly Archives: July 2016

Brexit could well mean losing control

Oh, the irony. The Leave campaign slogan, empty but nonetheless highly effective, was “we want control of our country back”.
The early reports from the Brexit negotiations are pointing towards a Norway-type associate membership of the EU, which would look like:

  • Keeping access to the single market … 
  • … but with a pause on free movement of people into UK for 5 – 10 years
  • Continue to pay a levy to the EU budget
  • Continue to be bound by EU laws
  • Maybe continue in some EU science and research networks.  

But

  • No UK elections to the European Parliament
  • No UK nominations of European Commissioners
  • No UK ministers voting in the European Council of Ministers.

The American war of independence started with the battle cry, “no taxation without representation”. 

Someone said that all democracies eventually come to an end because they commit suicide. 

Voting to not have a vote in future, to have less control, seems a good way to start.

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Six ways to grow local employment using tax policy

In a recent blog I looked at Brexit and concluded that the UK needed to build new international bridges, and fix the economy at home: to “find a progressive economic solution with working dignity for all communities, not just the winners“.

So, how might we solve the need for a progressive working economy for all communities?

Thinking broadly, we might imagine a money-free utopia where everyone swaps butter for eggs over the gate with their neighbours, and with exotic passing travellers swapping their silks and spices for your bread and ale. A sort of cosy Iron Age Emmerdale. That is, until you need antibiotics or an X-ray…

So, here in the 21st century, we need to make the economy work for everyone, even with money circulating which can so quickly leave a local economy to go into the bank accounts of a small, rich elite. Local sourcing is part of the solution, as it delays the eventual departure of money.

Well, tax policy is strong way to sort this out. But to date, tax policy has focused on things like Corporation Tax and how much tax companies should pay, and the scandals of their tax avoidance with offshore accounts. We need to bring tax policy nearer to communities.

Tax policy should be used as an instrument to shape local economies.

1. To start with, whether it is done as a benefit or a tax credit, create a minimum income for everyone aged 16 and above. This would be enough to live on, where work becomes a fulfilling choice and so that the worst jobs have to pay the best.

2. To encourage more employment, shift taxes away from payroll and on to harm reduction by taxing pollution, sugar, tobacco, alcohol, carbon emissions, empty homes, empty shops and derelict eyesores. Land is the most efficient tax base, as it is hard to hide or move offshore, and it can be the most progressive base as well.

3. Similarly, tax credit places used for social wellbeing such as libraries, community centres, adult education, cafes and parks.

4. To reduce inequalities, increase the tax thresholds above twice average earnings, returning progressively to the high percentage rates of tax for high income levels used up to the 1970s.

5. Also to reduce inequalities, taxing inheritance is essential, even though it is unpopular with the right wing newspapers. A decent social housing programme would ensure that family inheritances were not the only way to the next generation to find shelter. This tax is then redistributed to support work and wellbeing.

6. For manufacturing and goods, the circular economy of recycling another organisation’s ‘waste’ as a valuable raw material is key to sustainability, so more tax is needed from all raw materials which are extracted from the earth (such as oil, gas, minerals, coal, stone) to encourage the circular economy. Similarly for renewable energy sources. Our landfill sites and our oceans are brimming with rubbish, and tax policy is one way to help.

By using tax revenues to support the creation of new local economies we can avoid the danger of becoming dependent on needing to maintain sources of tax revenue which are themselves harmful and unsustainable.

Brexit – now is the time to build new bridges

There will be many books about Brexit on sale in the shops soon. These will probably include – historical accounts, political memoirs, lessons for managers, public relations handbooks and much besides.

But we know the past. Fundamentally it was a vote of rage, of disconnected people in communities who felt they had been thrown under the bus to save the well-off; who felt their livelihoods had been sacrificed to keep the Stock Market dividends rolling in. Immigration was the target for this rage, cynically whipped up with racism and xenophobia being made to seem respectable.

The vote against the EU was conflated with a vote against EU migrants. And, against refugees coming to the EU to escape from war, including areas being bombed by the UK and its allies.

The message of the economic benefits of the EU – the heart of the Remain campaign – failed to work in communities where the economy was already on its knees. To some, the Leave vote was retribution time. To paraphrase a message back to the London metropolitan elite – you’ve peed in our soup, now we are going to pee in yours.

But looking forward, what should we plan for?

If you still believe in an international future, here are some strategies we could consider.

Well, first we could have the Grim Reaper strategy. Basically, the Leave vote was predominantly elderly, the Remain vote predominantly young. Easy. Just wait ten years … fewer Leave, more Remain, have another referendum and back to normal. Tempting, but alone it is too passive.

Secondly, we could have the Under The Radar strategy. We could press the UK government to try and negotiate with the EU for a least-worst exit. Something like “Norway plus”, which keeps the single market (free movement of people, capital, goods, services), budget contributions, research networks for universities, but no flag and no European elections. Again tempting, but we know it will be two years of constant right-wing bickering on Twitter and in the Daily Mail, complaining of selling out, conspiracy and betrayal. As someone said, these are people who cannot take yes for an answer.

Third, we could have a Cut Our Loses strategy. This sees the UK state break up into its various countries and regions. Scotland, Northern Ireland stay in, maybe London as well. England and Wales out. Manchester and Liverpool voted in (60%), but that area is probably harder to ring-fence than London. Tempting, and more likely now, but ultimately it gives up on England being progressive.

So, fourth, we could have a Build New Bridges strategy. Early days here, but this could include a range of initiatives, including:

1. Declaring our solidarity with all EU nationals living in the UK, calling for lifetime rights
2. Reaching out to “expat” UK nationals in the EU to win over more ambassadors
3. Giving young people reasons to stay hopeful: European exchanges, twinning, joint projects
4. Creating more international links and exchanges at the local community level
5. Building exchanges, twinning and joint projects between progressive local political groups
6. Giving students Europe-wide free movement to study without discrimination,

and crucially

7. Find a progressive economic solution with working dignity for all communities, not just the winners. In the 1930s Great Depression, President Franklin Roosevelt (FDR) in the USA experimented until he settled on the New Deal. This phrase is tarnished currently in the UK from the Blair governments’ time but the idea is sound. The 2010s Great Depression needs a response just as strong now as then.

Brexit and inequality at work

OK. At its best LinkedIn should be a forum for talking about working life. Though sometimes all-of-life takes over. Brexit is one of those moments. For the details, the FT on Saturday gives a thorough recap.

Some key points: Sterling at a 30-year low, intraday swing of over 10%. FTSE 100 down 8.7%. RBS shares down 34%. Spain’s Ibex down 12.35%, worst drop since 1992. Residential property values expected to drop 3-5% pa for next two years. London commercial property, as much as -18%.

Perhaps most telling, the resignation of the UK Prime Minister not even the lead news story that day.

There is a rage from people in the Brexit vote, and “Business as Usual” isn’t going to answer this rage. In 2008 we saved the banks but left many people feeling they had been thrown under the bus. We must do better this time.

Doing business does not have to be ever-greedier; ever more unequal; ever more indifferent to people’s plight.

Being an ethical and moral business is now far more than CSR and due diligence, or a nod at a charity during the swanky awards dinner. Crumbs from the table.

Leadership now requires that we do “Business as Unusual” and make a difference.

Posted on LinedIn on 27 June 2016